ExpertMedium1 markMultiple Choice
CPA · Question 77 · Area IV: Forming Conclusions and Reporting
An auditor is performing a Single Audit. The auditor identifies $20,000 of questioned costs in a major program. The total expenditures for that program are $5,000,000. The threshold for reporting questioned costs is $25,000. <br/><br/>Must the auditor report this finding?
An auditor is performing a Single Audit. The auditor identifies $20,000 of questioned costs in a major program. The total expenditures for that program are $5,000,000. The threshold for reporting questioned costs is $25,000. <br/><br/>Must the auditor report this finding?
Answer options:
A.
Yes, because all questioned costs must be reported.
B.
Yes, because it indicates a control deficiency.
C.
No, because the questioned costs are below the $25,000 reporting threshold.
D.
No, unless the costs relate to fraud.
How to approach this question
Single Audit Threshold = $25,000. Under? Don't report. Over? Report.
Full Answer
C.No, because the questioned costs are below the $25,000 reporting threshold.✓ Correct
No, because the questioned costs are below the $25,000 reporting threshold.
Under the Uniform Guidance, the auditor is required to report known or likely questioned costs that exceed $25,000 in the Schedule of Findings and Questioned Costs.
Common mistakes
Thinking the threshold is lower or that all errors are reported.
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